MTN South Africa has shed approximately 1.5 million prepaid consumers since the beginning of the year, leading to a reduction in the overall subscriber base. The company continues its targeted effort to reduce the number of users reliant on borrowed talk time.
The prepaid customer base decreased from 29.7 million at the end of December to 29.3 million by the end of March, and then to 28.2 million by the end of June, representing a 4.5% year-on-year decline. These losses reduced MTN South Africa's total base by 0.7%, bringing it to 39.5 million. It is worth noting that this base had shown growth of 3% in the first quarter.
MTN attributes this drop to 'negative net additions in the prepaid market, as the focus shifts to improving the quality of the base.' Voice revenue fell by 10.2% over the six months ending in June, a sharper pace than the 9.6% in the first quarter, indicating a worsening situation in the second quarter. This marks the fourth consecutive quarter where voice revenue has declined in MTN's domestic market, with the rate of decline increasing in each reporting period.
Service revenue grew by 1.5% to R21.9 billion, remaining below the low-to-mid single-digit target range that the group confirmed as a medium-term goal for this division. Total revenue decreased by 1.6% to R24.8 billion, while device sales dropped by about one-fifth, amounting to R2.9 billion by segment figures.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) fell by 7.6% to R8.5 billion, and the margin shrank by 2.3 percentage points to 34.2%, which is below MTN's stated range of 35–37%. Excluding the impact of the MTN group's share price on the South African employee participation scheme reserve, EBITDA fell by 3.8%, and the margin stood at 37.1%, which is 0.8 percentage points lower.
Healthier Business
Currently, South Africa generates 19% of the group's service revenue but only 15.2% of the group's EBITDA. MTN's position is that customer attrition leads to a healthier business. The company is scaling back the XtraTime program, which provides prepaid customers with talk time and data, redirecting them instead to top up with money.
According to its own data, this is yielding results. Talk time loan repayment rates improved from approximately 50% in October 2025 to 70% currently, resulting in a significantly smaller volume of outstanding amounts. Overall cash top-up remained relatively stable, but excluding talk time loan repayments, it grew by 9.4%. Prepaid data revenue increased by 4.4%, accelerating to 5% in the second quarter compared to 3.8% in the first, and prepaid data consumption rose by 23.6%, reaching 4.9 GB per subscriber.
Prepaid service revenue declined by 3.3%, matching the first quarter level and representing an improvement compared to the 3.8% drop in the fourth quarter of 2025. However, costs are reflected in other areas. Fintech segment revenue, including XtraTime, fell by 16.3% to R701 million. Digital service revenue decreased by 7.5% due to weakened prepaid top-up activity.
The decline in voice revenue is harder to fix than prepaid because it is not primarily related to pricing. Capitec Connect, operating on the Cell C wholesale network, cancelled inter-SIM call charges in April and processed 768 million minutes of voice traffic in the year leading up to February, which is 150% more. It sells banking relationships, not minutes, and there is no tariff below free.
MTN links its voice revenue decline to customer migration from out-of-bundle usage towards bundled offers and pure data traffic, as well as the adoption of VoIP and digital messaging. The company noted that this shift was observed in both the prepaid and postpaid segments. The rest of the business remained resilient: postpaid consumer service revenue grew by 4.9%, and the postpaid base increased by 9.1%, reaching 4.8 million, supported by the price increases introduced in February. Corporate segment revenue grew by 5.8%, and wholesale revenue grew by 13.7%, a noticeable improvement compared to 6.9% in the first quarter.
The growth in the wholesale segment is driven by national and international roaming, as well as fixed and mobile traffic, partially offset by the decrease in Telkom's national roaming revenue due to reduced traffic volumes and a lower mobile termination rate of 2 cents/minute, effective in July 2025. Data revenue grew by 4%, reaching R10.9 billion, while network traffic increased by 27.7%, and average usage in the postpaid segment rose by 32% to 32.3 GB per month.
MTN blames the decrease in prepaid customer purchasing power on higher fuel costs, increased interest rates following the Reserve Bank's repo rate hike to 7% in May, and 'localized civil unrest.' Meanwhile, South Africa's figures stand out against the group's overall performance, which increased service revenue by 17.5% in constant currency to R115.3 billion and expanded the EBITDA margin by 3.1 percentage points to 47.6%.